Basics and Leaseback
No one wants to be a homeless home-owner. When you are in the process of selling your home, sometimes the dates you set sneak up on you. You feel like you mention it one day and you turn around and it is time to sell the house. This can cause problems to arise whenever you have not yet closed on your new home, and have some time in between. It can feel like you are going to miss out on the sale or be without home. But the reality is that you can both take advantage of initial buzz and follow through on the sale, and still find someplace to live temporarily. This can happen especially when you are moving areas, but don’t worry, we’re here to help with some basic pointers on finding a temporary residence, whether you need a year, a week, a month or three months. Sometimes loans can take months to get approved, especially government loans like USDA and FHA. Sometimes the offer may include special considerations and requests, and may take a month to finish, and if they are offering more than asking price you may want to go forward anyways.
This is a very risky option. A leaseback is when one side allows the other to move-in early or stay in the home for a month or two before the buyers move-in. In this situation whoever is renting is basically the tenant, and the other is the landlord. This means all special protections apply. These contracts are normally done month by month with the landlord able to end it at any time, with at least a week notice.
- A leaseback where the seller allows the buyer to live there while the deal is closing is the riskiest, especially for the seller. If they haven’t closed, the buyer can still live there while the seller works with them to finalize the deal. But if they trash the property or back out before closing, there is little recourse. In this situation your only option is to keep their deposit, and maybe sue for damages, but that means legal fees.
- Situation 2 is less risky, if the deal has closed and the buyer just basically moves in early. If they have already closed and the title company and bank have already made payment, then the seller is at less risk because it is harder to back out. Though if damage occurs, and the sale agreement mentions that certain repairs were to be made and those repairs were undocumented and broken again by the tenant, the seller could be at risk. But that is when you just keep the deposit and make sure you document the condition extensively.
- If the seller rents from the buyer however, there is less external factors to worry about. Someone who lived there for 10 years is going to keep living the same way more than likely. You already know how they lived, and if they are paying rent and made a deposit, the likelihood it blows up is less likely.
In our next post we will be discussing options you have in the case that you do need to stay somewhere between homes. If you would like more information, please contact The Damron Group Realtors in San Marcos, TX.